Looking for a vehicle that is from a popular manufacturer, in a neutral colour, and with a complete service record (if you’re buying pre-owned) will assist in counteracting depreciation over the course of ownership.
Depreciation is the rate at which a car loses its value over time and is affected by several factors, including but not limited to wear and tear, mileage, usage, brand, model, and economic conditions, according to third-party warranty provider MotorHappy.
Almost any normal car loses its value over time, with the rare exception being scarce and vintage autos that hold their hold value due to their rarity and status, and sometimes even appreciate.
“The rate of depreciation is highest in the first year of ownership and continues steadily over the next three to five years,” said MotorHappy.
“Depreciation is important to car owners because it has a direct impact on the resale value of your car.”
How to beat depreciation
The first step in beating depreciation is to research different car manufacturers and models as not all cars depreciate at the same rate.
Certain automakers have a good reputation for reliability and after-sales service, leading to their vehicles holding their value better over time. They also tend to be among the more popular brands on the market.
Cars with great fuel economy will always be more in demand, too.
Additionally, neutral colours such as black, white, and silver are popular and tend to be sought after even in used cars. There’s no conclusive answer as to why motorists prefer more toned-down hues, but the general assumption is that they are less divisive than brightly-coloured paints and therefore sell quicker in the used market.
After taking ownership of your new ride, it is also important to take care of the car itself with regular services and necessary maintenance, and to keep records of these expenses as proof of a car’s clean history.
Dealership vs Private sale
When the time comes to sell your car and get a new one, you’ll more than likely want the highest price you can get, and will have to decide between trading it in at a dealership or selling it out of hand.
Traditionally, trade-ins offer a lower value as the dealership still has to make a profit with its markup, but this process is usually more convenient for the seller.
Most private sales will offer a better price for the vehicle, depending on the make and model, but this comes with extra legwork on the part of the current owner on top of other risks, such as the car being on the market for much longer, scammers trying to take advantage of an unsuspecting seller, and problems with financing the purchase and changing ownership details.
“The bottom line is that car depreciation is inevitable, but you can minimise the effects of depreciation and ultimately have a positive influence on the value of the car,” said MotorHappy.
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